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Hasbro news that may impact MicroProse
Just saw this HAS news item and it sounds like they continue to be disappointed with Hasbro Interactive, the division that owns MicroProse. Sounds like more job cuts are on the way. Might want to stock up on a spare copy of your favorite Civ title. (bold font is mine)
Hasbro 3rd-Qtr Profit to Miss Forecasts, to Cut Jobs
10/12/0 11:25 (New York)
Pawtucket, Rhode Island, Oct. 12 (Bloomberg) -- Hasbro Inc.
fell as much as 20 percent after the world's No. 2 toymaker said
third-quarter profit was less than expected and it will close
plants and cut about 5 percent of its workforce to reduce costs.
Waning demand for Pokemon and Star Wars toys, a shortage of
electronic components and the effect of a strong U.S. dollar on
overseas operations has hurt Hasbro. Hasbro said in a statement
third-quarter earnings will drop to an estimated 6 cents to 10
cents a share, from 43 cents a year earlier. Analysts' average
estimate was 32 cents, according to First Call/Thomson Financial.
The toymaker will cut as many as 550 jobs and shut plants in
Cincinnati, San Francisco, and Napa, California. It will take a
fourth-quarter pretax charge of about $70 million for severance
costs and lease terminations, and discontinued or disappointing
product lines may result in another pretax charge of $70 million
to $100 million.
``The announcement sends a statement that management will be
getting down to basics in order to enhance profitability,'' said
John Miller, an assistant portfolio manager who helps oversee
about $4 billion at Ariel Capital Management, one of Hasbro's
largest shareholders with 13.6 million shares.
``We do not expect management to stop here. Whenever you have
management focus on core business, we look at it positively,''
Miller said.
Interactive Business
Officials at Hasbro weren't immediately available for
comment.
The shares of Hasbro, which makes Monopoly games, Tonka
trucks and Play Doh, fell 2 3/8 to 9 1/4 in late morning trading
of 2.01 million, more than double the three-month daily average.
The stock has dropped 39 percent this year.
Hasbro is expected to report earnings next week.
Hasbro said its money-losing interactive games business
continues to perform below reduced forecasts, and plans to explore
alternatives for the business. Started in 1995, Hasbro Interactive
makes games for the Internet, personal computers and video-game
consoles such as Nintendo64 and Sony PlayStation.
Higher transportation costs and rising prices for oil and
resin, used for the plastic in toys, will also hurt earnings, the
Pawtucket, Rhode Island-based company said.
Hasbro said it will consolidate its U.S. toy group in Rhode
Island. Additional job cuts will come from other, unspecified
areas of the company, the company said.
Earnings for the full year will fall to between 40 cents and
50 cents a share, excluding the restructuring charges, the company
said. Analysts' average estimate was $1.04 a share, according to
First Call.
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